Obama's address was largely devoted to detailing how America can be the best in an array of areas, including technology, infrastructure, trade, and education. But he did touch on health care, and he acknowledged the partisan divide that has existed since the beginning of the health care reform debate.

"Now, I've heard rumors that a few of you have some concerns about the new health care law," he joked during his speech, which marked his fourth address to the entire Congress.

"So let me be the first to say that anything can be improved," he said. "If you have ideas about how to improve this law by making care better or more affordable, I am eager to work with you. We can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses."

That line earned a huge eruption of applause from members of Congress. Obama was referring a bill that Sen. Max Baucus (D-Mont.) and Senate Majority Leader Harry Reid (D-Nev.) introduced earlier Tuesday that would repeal an unpopular provision in the healthcare reform law that requires employers to fill out a 1099 tax form every time they spend $600 on goods and services.

However, Obama said he's not willing to "go back to the days when insurance companies could deny someone coverage because of a pre-existing condition."

"As we speak, this law is making prescription drugs cheaper for seniors and giving uninsured students a chance to stay on their parents' coverage," he said. "So instead of re-fighting the battles of the last two years, let's fix what needs fixing and move forward."

Obama also vowed to rein in spending, proposing a five-year freeze on all domestic spending as a way to start. He said he'd look for ways to reduce healthcare costs in programs such as Medicare and Medicaid, which he called the "single biggest contributor to our long-term deficit."

Bringing Down Costs

He also said he'd look at "other ideas to bring down costs," including considering the Republicans' long-championed idea of reforming the medical malpractice system.

Rep. Dr. Phil Gingrey, (R-Ga.) introduced a bill earlier in the day called the Help Efficient, Accessible, Low-cost, Timely Health Care (HEALTH) Act of 2011 that would place caps on the amount juries could award patients for medical mistakes.

Gingrey told MedPage Today after the speech that he was "thrilled" that the president mentioned malpractice reform. Gingrey was seated next to Democratic Rep. David Scott of Georgia, one of the 57-cosponsors of his bill, and Gingrey said both men stood and cheered when the president gave them a "shout out."

Seating at this year's State of the Union didn't adhere to the usual Republicans-on-one-side-Democrats-on-the-other-side standard. Instead, members were encouraged to sit next to someone of the opposing party. Gingrey said he liked the change and hopes it continues next year.

Many of the Congressmembers also wore white ribbons in honor of their colleague Rep. Gabrielle Giffords (D-Ariz.), whose shooting helped spur the bipartisan attitude in the chamber on Tuesday evening.

When Obama delivered last year's address, it was a very different political climate. He had not yet signed the Affordable Care Act (ACA) into law, and the election of Republican senator Scott Brown in Massachusetts appeared to have derailed the Democrats' efforts to pass healthcare reform legislation. Since then, the legislation has passed and many aspects of the ACA have gone into effect, but Republicans are working to repeal it.

This year, like the members who sat with colleagues in the opposing party, Obama focused heavily on bipartisanship. He reminded the members of Congress how lucky they are to be part of the U.S. government, despite the constant disagreements between the parties.

"As contentious and frustrating and messy as our democracy can sometimes be, I know there isn't a person here who would trade places with any other nation on Earth," Obama said.